Factors Affecting Customer Satisfaction in Banking Sector of Pakistan

IntroductionBanking sector in Pakistan consists of a central bank named as State Bank of Pakistan (SBP), which is central bank of country and a combination of local and foreign banks. Total of 53 banks currently are operating in Pakistan, five of which are public sector banks (First Women Bank Limited, National Bank of Pakistan, Sindh Bank Limited, The Bank of Khyber, and The Bank of Punjab), four specialized banks (Industrial development Bank of Pakistan, SME Bank Limited, The Punjab Provincial Cooperative Bank Limited, and Zarai Taraqiati Bank Limited),While seventeen private banks (Allied Bank Limited, Askari Bank Limited, Bank Alfalah Limited, Bank Al Habib Limited, Faysal Bank Limited, Habib Bank Limited, Habib Metropolitan Bank Limited, JS Bank Limited, KASB Bank Limited, MCB Bank Limited, NIB Bank Limited, SAMBA Bank Limited, SILKBANK Limited, Soneri Bank Limited, Standard Chartered Bank (Pakistan) Limited, Summit Bank Limited, and United Bank Limited), five Islamic Banks (AlBaraka Bank (Pakistan) Limited, BankIslami Pakistan Limited, Burj Bank Limited, Dubai Islamic Bank Pakistan Limited, and Meeza n Bank Limited), also represented are the local branches of six foreign banks (including Barclays Bank PLC, Deutsche Bank AG- Pakistan Operations, Citibank N.A.- Pakistan Operations, HSBC Bank Middle East Limited Pakistan Operations, Oman International Bank S.O.A.G Pakistan Operations, and The Bank of Tokyo-Mitsubishi UFJ Limited Pakistan Operations), eight micro finance banks (KASHF Microfinance Bank Limited, Khushhali Bank Limited, Network Microfinance Bank Limited, NRSP Microfinance Bank Limited, Pak Oman Microfinance Bank Limited, Rozgar Microfinance Bank Limited, Tameer Micro Finance Bank Limited, and The First Micro Finance Bank Limited), and eight development finance institutions (House Building Finance Company Limited, Pak Brunei Investment Company Limited, Pak-China Investment Company Limited, PAIR Investment Company Limited, Pakistan Kuwait Investment Company Limited, Pak Libya Holding Company Limited, Pak Oman Investment Company Limited, and Saudi Pak Industrial & Agricultural Investment Company Limited) (www.sbp.org.pk).All the commercial banks in Pakistan offer the same standard facilities find anywhere in the world including, debit cards, credit cards, travelers cheques, money transfers, personal loans, car finance, etc. selected banks also offer specialized services such as VIP accounts, ladies accounts, minor and student's accounts, plus e-banking platforms such as telephone and PC banking which offer 24/7 access. Particularly, the expansion in private banking business, along with customized services, has created a cut-throat competition in this sector (Khalid & Irshad, 2010). Customer satisfaction is the real diamond and competitor advantage over other companies. Today businesses compete for customers and customer satisfaction is becoming a key performance indicator and an essential element of business strategy. Customer expectations are key drive behind customer satisfaction. Customer Satisfaction is an indicator of customer purchase intensions and brand loyalty.Companies are trying to have high customer satisfaction and trying to keep their current customers rather than spending additional resources to attract potential new customers. Therefore the producers and marketers tried to keep their customer satisfied so that they may become band loyal and in the way companies can get maximum share in the market. So after knowing the above mentioned problem the purpose of the study was to find the interrelationship between service quality, customer loyalty and Customer Satisfaction, in banking sector of Pakistan.This study is an attempt to explore the interrelationship between service quality, customer satisfaction and customer loyalty in Pakistani context. This will be a real contribution for the banks because in this way, banks can seek guidance to improve their service quality in order to retain their customers and seek competitive advantage by getting more loyal customers. …